The Pennsylvania Gaming Group LLP could not obtain the proper paperwork by a 5 p.m. Friday deadline.
“The financial backers couldn’t get their acts together in time,” said local attorney and parlor developer Jerome Finefrock, who has acted as a spokesman for the project. “It just didn’t happen.”
The state Gaming Control Board earlier this month had rejected the group’s licensing application for the $150 million project planned for Queen and Orange streets, saying it did not have a required $50 million bond.
The group initially had planned to appeal that decision by Friday’s deadline.
Pennsylvania Gaming wanted to put the parlor in the Bulova Technologies building for two years before possibly moving it to another site. The Burle Business Park along New Holland Avenue was discussed as a possible second location.
The proposal drew fire from legislators and community groups, who said a slots parlor would be bad for the city.
In the end, Pennsylvania Gaming simply could not put together the necessary paperwork for its appeal on time, Finefrock said today.
“It got caught in a morass of lawyers and accountants,” Finefrock said.
Thirty minutes before the 5 p.m. deadline Friday, the group decided to pull the plug.
Said Christopher Raphael, a New Jersey man who is CEO of the Pennsylvania Gaming Group, “We thought the wisest thing was to fold our tent and go home.”
Raphael and Finefrock said the issue came down to having the proper paperwork for financing.
The group did have a group of financial backers, said Finefrock, though he declined to identify them.
And those backers agreed to provide the $50 million bond, he said. However, that bond needed to be backed up by a letter of credit, Raphael said.
“It’s like raising two $50 millions,” Raphael said.
The letter of credit, Raphael said, “is a simple document, but the banks are all insisting that whoever puts it up has to have $50 million worth of assets. If the assets are in property here and there and everywhere, you have to gather up those assets, the bank values them and then lets you issue the $50 million letter of credit.
“It was tedious. As the small boys on the block, we thought it was wise to end the issue.”
Finefrock expressed doubt that any casino application would go forward.
A slot-machine law passed by the Legislature in July 2004 provides for 14 gambling licenses in Pennsylvania.
Numerous applicants are vying for those licenses, and Finefrock wondered if opposition by Republican lawmakers will kill the whole program.
“There’s a good possibility that Republicans will stomp the casinos with a poison pill,” he said.
The decision by Finefrock’s group to withdraw its appeal was welcomed by the plan’s critics, who said they were not surprised.
Local anti-gambling activist Dianne Berlin said, “I’m grateful,” but added, “My relief is only for Lancaster. The 14 venues are still out there. The same thing is happening to every community.”
Lancaster Mayor Rick Gray said he was not surprised by the group’s withdrawal of the plan, which supporters said would have generated new jobs and millions of dollars in revenue for the city.
“It seemed like a bad bet from the beginning. ... I hadn’t heard a positive thing about the way it was proceeding, so I pretty much assumed it was a loser.”
Asked if he was disappointed the slots parlor would not be coming to the city, Gray said, “I had such low expectations that, frankly, I never got my hopes up. I never thought it (would be) realized, anyway.”
State Sen. Gibson Armstrong agreed.
“In my opinion, it was ill-conceived from the start,” he said. “I don’t think they were properly prepared, and I think everybody is much better off for it. I don’t think they had the wherewithal to run a casino.”
Armstrong, state Sens. David J. Brightbill and Noah Wenger and state Reps. Gibson Armstrong and Roy Baldwin had collected more than 15,000 signatures opposing a slots parlor in Lancaster County.
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